Portugal on the Verge of an Almighty Flop

New reports suggest that Portugal may have already followed Greece into recession, even before implementing austerity measures that the EU has demanded in order for the debt ridden country to receive its bailout package. It is expected that reports due to be released tomorrow will show that the economy shrank by 0.3 percent in the first quarter. Despite ongoing resilience, many feel that whilst Sterling looks weak, it is certainly not as frail as the Euro. Only time will tell…

Pound Sterling – UK Markets

The pound reached its highest levels against the euro in almost two months before a report today showed that manufacturing and industrial production unexpectedly came in 0.1 and 0.6 percent below expectation respectively. On the back of this Sterling has taken a small hit against both the euro and US Dollar. On a slightly lighter note, it is suggested that petrol prices may be set to fall in coming weeks as crude oil prices fell below $100 a barrel and US petrol futures slumped yesterday.

US Dollar – US Markets

A new report suggests that retail sales in the US probably climbed in April. Growing employment levels is allowing Americans to negate a large proportion of the negativity that has stemmed from the ever growing increases in global energy costs. A projected 0.6 percent gain in purchases across the economy would follow a 0.4 percent increase in March. To give readers an idea of the rate at which energy costs have risen, fuel costs in the US averaged $3.81 a gallon in April. This compared to $3.54 in March. According to global investors the US currency could remain under severe pressure as monetary authorities appear to be wedded to keeping interest rates lower for longer than the UK.

Euro – European Markets

Whilst the regions debt crisis appears to be in turmoil, the euro rose from a three-week low versus the US Dollar amid renewed optimism growth in Europe is accelerating. The single currency managed to strengthen against 12 of its 16 major counterparts. A report tomorrow is expected to show that Europe’s economy grew at a faster pace than in the first quarter. Whilst this new found optimism is a refreshing breather for a currency that is severely under pressure, investors are keen to highlight that the debt ridden nations of the euro zone are still a major concern.

Other Currencies – Highlights

A somewhat overvalued New Zealand Dollar is set to climb to record highs on the back of rising prices for dairy and meat exports. The dollar climbed 6.2 percent over the past two months versus the greenback which is the best performing among 31 major currencies. For those of you wearing sombreros the Mexican Peso retreated in spite of optimistic comments from the Bank of Mexico’s Governor that the economy will grow by 5 percent this year. This is due to investors fleeing to the greenback amid fresh concerns over the stability of the euro zone’s sovereign debt.